The Noticee (Mr. Vijay Mallya) violated SEBI Act and PFUTP ...

Tycoon's shell game: Masking identity, manipulating markets through layered FII trades.

Case Laws     SEBI

August 30, 2024

The Noticee (Mr. Vijay Mallya) violated SEBI Act and PFUTP Regulations by concealing his identity and using the FII route to trade in securities of his group companies in India. He employed manipulative and deceptive tactics by layering transactions through overseas entities he controlled, despite being the beneficial owner. This was detrimental to investors and intended to deceive the market, violating Regulations 3(a), (b), (d) of PFUTP Regulations and Sections 12A(a), (c) of SEBI Act. Matterhorn Ventures' shareholding in Herbertsons, shown as FII, actually belonged to the promoter category as it was funded by Mallya, misrepresenting facts and violating Regulation 4(2)(f) of PFUTP Regulations. Mallya devised a scheme to trade indirectly in his group companies' shares through layered transactions and the FII route, masking his identity and defying regulatory norms - fraudulent, deceptive acts threatening market integrity. SEBI restrained Mallya from accessing the securities market, dealing in securities directly/indirectly, or associating with any listed/to-be-listed company for 3 years, and froze his existing securities holdings during this period.

View Source